The overall goal of this study is an integrated understanding of the processing of sound by the two ears and the application of this understanding to improving the functional hearing abilities of people with hearing losses or neurological disorders. The auditory system is specialized to take advantage of the differences between the pressure signals at the two ears, and these differences are used to create a perceptual map of the acoustic environment. The best known reflections of this binaural processing are the localization of sound sources and the ability to listen to one talker in the presence of other talkers (the "cocktail party effect"). We believe that some of the difficulties experienced in noisy environments by listeners with hearing losses are related to an incomplete utilization of binaural differences, and a part of our study is directed toward testing the hypotheses with speech intelligibility experiments both in sound fields and using headphones. The specific aims of the proposed work include: the development of computational models of binaurally sensitive neurons in the auditory brainstem and midbrain, psychophysical experimentation and modeling that relates psychophysical abilities to physiological responses, measurement of speech intelligibility and localization abilities in reverberant environments and in the presence of multiple sound sources, and the development of techniques for testing listeners with and without hearing aids in simulated complex environments.